Tuesday, 23 May 2017

According to
media reports, 20 billion litres of pristine New Zealand water are going to be
exported over the next fifteen years, with not one cent in royalties being paid
here.

By contrast, it
has been estimated that the oil and gas industry paid around $230 million in
royalties to the New Zealand Government in the last year alone, and has paid as
much as $430 million in earlier years, based on products discovered and sold.
The oil and gas royalties regime is notoriously complex and uneven, with many
tax deductions available, and no levy on exports. It is applied at rates that
can vary from 5% to 20%. Nevertheless, petroleum exporters are typically paying
about 42% of their profits in taxes and royalties to the government.

Leaving aside the
argument about whether oil and gas exploration is a good thing to be
encouraged, and the complexity of the regime, it does provide a useful point of
comparison to the way in which the likely burgeoning fresh water export trade is
treated, all the same.

It is certainly
true that New Zealand has an abundance of fresh water, so it is easy to see the
attraction fresh water exports pose. And it is not new. For over 30 years there
has been steady yet periodic interest in establishing a fresh water export
industry. So, at one level, the argument could at least be mounted that fresh
water exports are just another form of primary products exports from this
bounteous country.

But the argument
is not that simplistic. The great debate occurring about water needed for
irrigation demonstrates the pressures being placed upon our water resources.
The argument over the proposed Ruataniwha Dam in Hawkes Bay and the virtual
drying up of Canterbury’s major rivers earlier this year as a result of a high
demand for irrigation brought on by dairy intensification highlight the point.
And it is also intensely political. Environment Canterbury was sacked by the
Government in 2010 over the allocation of water rights; iwi interests have long
recognised the power of the ownership of water as the Resource Management Act
debate shows; freshwater recreational interests have for equally long sought to
preserve their traditional roles and relationships with water; and, the Land and
Water Forum has patiently attempted to bring all the groups to the table to try
to achieve a coherent policy response. On top of all this comes mounting
justified public concern about the swimmability of our major rivers. The
response of seeking as a first step to make all major rivers at least wadeable
is widely seen as too little, too late.

Against this
complexly yet finely woven tapestry, it seems somewhat incongruous that a
virtually unregulated and certainly untaxed water export industry is being
allowed to develop. At the very least, there needs to be a coherent royalties
regime put in place, akin perhaps to that for oil and gas, to ensure that our
water resources are not being just given away. But that will not be enough of
itself. There also needs to be a clear national policy developed about water
exports. For too long there has been a complacency that water will always be
abundant in New Zealand, and while that is generally true, recent developments
show we can no longer take it for granted. Dirty and dried up rivers, and
contaminated acquifers are not what we have usually been used to, nor do we
want them to become the norm. Especially, if at the same time, we have to sit
and watch the ships sailing away with millions of litres of our pure water for
which they have paid virtually nothing.